What defines a joint venture in business?

A joint venture is defined as an agreement between two or more parties to collaborate and share resources for a specific project or business initiative. This typically involves contributions from all parties, which can include capital, technology, or expertise, with the aim of achieving a common goal while remaining distinct entities. The shared purpose and the temporary nature of the collaboration often delineate a joint venture from other forms of collaboration, fostering a partnership designed primarily for that specific task or project.

The other choices highlight different business arrangements that do not embody the essence of a joint venture. For instance, a partnership where one party is dominant refers to an imbalance in authority and contribution, which detracts from the collaborative spirit characteristic of a joint venture. A contract for exclusive product distribution implies a more singular or unilateral agreement instead of mutual collaboration and resource sharing. Lastly, a merger of two independent companies involves the integration of entities into a single organization rather than a cooperative arrangement focused on a specific project. Thus, the definition of a joint venture, emphasizing the shared resources for a defined task, is what distinctly sets it apart.